Investment Thesis
SpringBig is in acute financial distress with negative stockholders' equity of -$12.5M, indicating the company is technically insolvent on a balance sheet basis. Revenue has declined 7.4% YoY while net income has collapsed 73.1%, resulting in a deeply negative -14.2% net margin and operating cash flow insufficient to service $9.2M in debt. The 70% gross margin suggests underlying business viability, but severe operational underperformance and liquidity crisis (0.54x current ratio) create existential financial risk.
Strengths
- Strong 70% gross margin indicates pricing power and product-market fit in core services
- Positive free cash flow of $321K suggests some underlying operational cash generation despite losses
- Computer programming services sector has structural growth tailwinds
Risks
- Critical: Negative stockholders' equity of -$12.5M indicates technical insolvency and elimination of equity buffer
- Severe liquidity crisis: Current ratio of 0.54x means only $0.54 of current assets per $1 of current liabilities
- Revenue declining -7.4% YoY concurrent with -73.1% net income deterioration indicates loss of pricing leverage and/or volume
- Operating margin of -7.6% and negative interest coverage of -1.3x indicate operating losses exceed debt service capacity
- High debt/asset ratio ($9.2M debt vs $4.6M assets) leaves no capacity for operational disruptions
- Zero insider Form 4 activity in 90 days suggests lack of management confidence in recovery
Key Metrics to Watch
- Path to positive stockholders' equity - restructuring plan or capital infusion required
- Revenue stabilization and return to growth - current -7.4% decline is unsustainable
- Operating margin improvement - must achieve profitability to service debt and rebuild equity
- Cash burn rate and liquidity runway - current cash position of $1.5M at risk
- Debt refinancing or covenant compliance - negative equity may trigger default provisions
Financial Metrics
Revenue
22.8M
Net Income
-3.2M
EPS (Diluted)
$-0.07
Free Cash Flow
321.0K
Total Assets
4.6M
Cash
1.5M
Profitability Ratios
Gross Margin
70.0%
Operating Margin
-7.6%
Net Margin
-14.2%
ROE
N/A
ROA
-70.1%
FCF Margin
1.4%
Balance Sheet & Liquidity
Current Ratio
0.54x
Quick Ratio
0.54x
Debt/Equity
N/A
Debt/Assets
369.8%
Interest Coverage
-1.30x
Long-term Debt
9.2M
Disclaimer: This analysis is generated by AI based on publicly available SEC EDGAR filings.
It does not include stock price data and should not be considered financial advice.
All fundamental data is sourced from SEC public domain filings.
Always conduct your own research before making investment decisions.
Data Source: SEC EDGAR |
Analysis Date: 2026-04-15T11:09:20.794989 |
Data as of: 2025-12-31 |
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